Bet it looks like a puffy picture that is sewed, stuffed until you have a full quilt. Bet it is pretty. So to set it off, make a border like you were a bias tape finding (with batting of course) NS i BETCHA' if will be even prettier.

I'm an old hand at covering up mistakes.

Its a beautiful quilt and I would be proud to have it!

From the looks of your picture, I think it was the lining that shrunk. Very pretty indeed. Don't worry about it. Just give the gift, no apologies and wait for the reaction. Bet you will be surprised.

Sorry that this happened to you, but if you steam it perhaps the batting will relax some. Or you could place a plastic sheet on your carpeting, lay a bed sheet on top of that. Dampen the quilt and place it on top of the bed sheet. Gently square it up and pin right through the sheets into the carpet with T-pins.
Lastly, if the quilt is pretty good other than the wonky binding, or at least that's what I can see in the pics, just redo the binding to fit the quilt's new smaller measurements.

I love your quilt! I always wash my quilts and dry them in the dryer, because I prefer soft huggable 'cuddle' quilts. I use 80/20 batting so they will 'pucker up' and feel like a quilt.
Until they get that feeling, they look like a wall hanging to me--just my personal opinion:)

Your quilt shrinking is typical of how I feel about some of my work when it is finished. It never looks as bad to others as it does to me.
Lots of good hints from other girls already said. All I can say is that I bet she will appreciate it anyway. I wouldn't apologize about anything unless she says something, which I doubt she will.
Pulling corner-corner I bet will help it. (tell her you mis-measured!)
Mariah.
After I have put something away for awhile, it always looks better when I take it back out and look at it.

re wash it on hot and then either hang dry it with weights or block dry it on a flat serfice. should restreach it back into shape
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I kind of like the puckering effect. Do you think if you ironed/pressed it from the back the edges might straighten? Another thought would be to sew some cotton lace around the edges which could camouflage an uneven edge, perhaps a ruffle.

I kind of agree with rustqlts. I love the pucker up look, I wash mosr all my quilts,after,quilting to give them that look. oh I can't see must pucking in the pictures. Juat around the binding , I would iron only the binding. I love the quilt fabric.

From the looks of your picture, I think it was the lining that shrunk. Very pretty indeed. Don't worry about it. Just give the gift, no apologies and wait for the reaction. Bet you will be surprised.